EUR/USD has come a considerable distance – SocGen

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The EUR/USD pair did not react to the PMI indices and is range bound after pulling back from yesterday’s high of 1.0927. In the opinion of economists Societe Generalethe pair has traveled a considerable distance.

Risk appetite depends more on ECB prices than on the Fed

“France’s manufacturing PMI and Germany’s services PMI rose in January to the highest level since June. Stagnant manufacturing in Germany dampens optimism about a further improvement in current conditions at tomorrow’s IFO, but may not dampen a fourth consecutive rise in expectations.”

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“About 93 basis points are currently discounted at the next two ECB meetings, compared to 46 basis points for the FOMC. We would say that more price risk hangs from the ECB than from the Fed.”

“We’re not looking for excuses to take profits on EUR/USD, but it’s another way of arguing that, portfolio flows aside, EUR/USD has come a considerable distance.”

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Source: Fx Street

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